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Business Assurance - More than ERM Applying Business Assurance principles combining Revenue Assurance and Risk Management practices in the Telecommunications, Media and Entertainment sectors

Introduction Enterprise Risk Management (ERM) is a sound concept and a fundamental part of what we should build into our business framework. But what about all the good stuff that really adds value to the business? Customer and stakeholder focus, cost control and profitability, managing and influencing the market and environmental factors that affect your business – what about getting to grips with these whilst managing risk? Business Assurance deals with these issues through visible business alignment and focus demonstrating active support for the business and removing the perception of negativity often associated with various aspects of risk management; primarily of holding the business back from its goals. At some point, every business function will have had some form of negative perception of the various business units engaged in managing risk. It’s time we changed that perception. We can’t go any further without a mention of the eTOM (enhanced Telecom Operations Map) Business Process Framework and the TeleManagement Forum. An excellent institution and driving hard to implement operational best practice throughout the industry. An admirable and difficult task and clearly the Forum is making significant strides forward and many participants/ members are now reaping rewards. Within the eTOM framework, there is an ERM model that seeks to ensure the implementation of appropriate business processes to manage Fraud, Security, Revenue Assurance, Audit and Intellectual Property. A significant overlap with Business Assurance, no doubt, but what we are seeking to do with Business Assurance is to take a further step forward – genuine coordination of every related Business Assurance business function and

active, invited participation in the business. No longer an afterthought, more a required participant in business planning, operational management and strategic direction for the business to be successful. And acting across the risk domains. Why should Business Assurance be so highly regarded? If you could add significantly to your bottom line, or entice more large corporate customers to your network, or reduce retail churn in highly competitive markets – would this make you listen? The problem historically with many aspects of ERM has been the negative focus of possible losses. Clearly, avoiding and managing risk is an essential element of Business Assurance, but when you consider all the positive returns that you can touch and feel, then these will make a big difference – not just to the Board, but to all stakeholders, customers, suppliers; current and potential. More market influence, more revenue, better cost control, greater profit at the product, service and corporate level. But doing it in a way that is not seen to be obstructive to business development. Not hindering those charged with making more money, or improving customer experience, but giving them the tools to do what they do best in a way that helps them get even more from their efforts. That’s what Business Assurance is about – it’s a risk management cocktail with a big twist of business common sense.

1 Business Assurance | Revenue Assurance | Fraud Management | Receivables Management | Security | Operational Assurance

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Business Assurance - More than ERM Applying Business Assurance principles combining Revenue Assurance and Risk Management practices in the Telecommunications, Media and Entertainment sectors

The Role of Revenue Assurance

Business Assurance Overview

Revenue Assurance has been with us as a concept since the early 90’s. But only in recent years do we see a concerted focus on this aspect of our business operations on a wide scale. Revenue Assurance has been vindicated through hard-won evidence of the reality that everything in our technology, organisation and operational infrastructure does not always work 100% correctly! We are so reliant on the integrity of our switches, transport systems, service platforms, mediation, billing, collections and provisioning systems that any small logic error, or technical glitch, can result in significant revenue leakage or increased cost – and with the data volumes often concerned, this can be many millions of dollars in a relatively short time period. And when you also consider that us humans are also prone to the odd mistake, then without some form of controls in place we are certainly going to affect both the top and bottom line.

With the power to access and better utilise data and knowledge from around the business, we are well positioned to consider the next evolutionary step in optimising our profits and customer experience; an even more integrated business approach to managing risk and profitability.

Thankfully, Revenue Assurance has been getting to grips with this conundrum. We have seen a distinct and wide recognition and understanding of the issues now emerging globally. And as we spur further into the digital, IP based, high-speed world where consumers want everything, and they want it now, we will find even more opportunity for cracks in our infrastructure to cause us pain. Revenue Assurance is the thread through the revenue stream – not just focussing on revenues, but also on the control of unnecessary costs – optimising profitability. This in itself is a step towards true business focus, towards Business Assurance, but there is more to come. With an increased focus on Revenue Assurance, we are also seeing some businesses look to the benefits of integrated functions, in particular Revenue Assurance, Fraud Management and Receivables Management, but there are so many other areas that can complement each other.

Let’s jump ahead a little to an industry that has highly converged technologies, high-speed multimedia access anywhere and its own equivalent of a banking infrastructure to manage the inevitable increase in e-commerce (t-commerce, mcommerce etc.). So many more points of interconnection on whole new levels. So many new and evolved technologies. And so, so many more business processes to make it all work. Not forgetting the ever increasing global mobility of consumers.

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Business Assurance | Revenue Assurance | Fraud Management | Receivables Management | Security | Operational Assurance

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Business Assurance - More than ERM Applying Business Assurance principles combining Revenue Assurance and Risk Management practices in the Telecommunications, Media and Entertainment sectors

With the evolving industry, there will be evolving challenges and opportunities. And with the increasing overlap between communications, media and financial domains, will come the need for even greater governance. Our businesses need to be prepared not only for the inevitable governance obligations that this will bring, but also for the opportunities to build business models that work with high-integrity and profitability as a focus from the point of concept throughout delivery and operation. Recognising what is on the horizon brings the concept of Business Assurance to life in a real way. Let us look at the potential for greater interaction between the various entities in our business. Most business areas are touched by Business Assurance: Marketing – not only helping to position the business as a trusted entity in the eyes of the customer and industry as a whole, but also designing profitable propositions with positive customer experiences based on inputs from Business Assurance resources. Product Management – working closely with the marketing team to design and implement assured products and services, driving the proactive attention to Business Assurance as the services are designed and built. This ‘Product and Infrastructure Assurance’ process is an essential preventative measure in managing risk and profitability. Sales – delivering the revenues on the propositions created by Marketing and Product Management. This is clearly the pointed-end of the business and as such needs to be carefully managed to secure good customers, who will stay with the business, at lowest cost. Fraud and credit risk is an issue at the front-end, but also this is often where critical process and system failures lead to revenue leaks downstream; incorrect

service definitions, selling services that don’t exist and so on. A robust sales and order management process will negate many risks and enrich the customer experience. Customer Services – reducing complaints and disputes, predicting and managing churn and improving the ability to up- or cross-sell products and services. There are many aspects of Customer Relationship Management (CRM) that are influenced by a strong approach to Business Assurance and the various aspects of data that would be analysed within. Information Systems and Networks – improving the confidentiality, integrity and availability (security) of systems and data and the efficiency of the technology and related processes that underpin the business operations. Billing and Charging – ensuring accuracy and reducing the risk of revenue leakage or inappropriate cost exposure. Credit and Collections – reducing risk exposure, aged debt balances and bad debt levels. Generally improving cash-flows whilst improving relationships with customers using intelligent systems and processes. Inter-party Management – keeping costs in check to improve profitability and ensure the integrity of 3rd party services when represented through your delivery channels. Roaming and Interconnect – reducing fraud exposure and revenue leakage, and ensuring the timely collection of roaming dues.

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Business Assurance - More than ERM Applying Business Assurance principles combining Revenue Assurance and Risk Management practices in the Telecommunications, Media and Entertainment sectors

There are many potential aspects to Business Assurance. It might not be essential to bring all related functions into a single team, but certainly having an excellent level of coordination and cooperation between teams would be essential if these were fragmented; creating a ‘virtual’ Business Assurance function. As a reference, the following functions might be considered as within scope of the Business Assurance team and process (and possibly more depending on your interpretation):

 Revenue Assurance  Fraud Management

Why Business Assurance? All businesses are exposed to a variety of risks. In particular, the risks of business disruption, revenue leakage, uncontrolled costs, inappropriate credit exposure, fraud and security failure can be particularly damaging; directly affecting customer perception, profitability and stakeholder value. Risks can come from a variety of sources, natural or man-made, accidental or deliberate, but it is the ability to predict, manage and mitigate risk in a cost-effective and customer-centric way that differentiates one business from another, and can make the difference between success and failure.

 Receivables Management (Credit, Collections and Debt Recovery)

 Security Management  Governance, Audit and Compliance  Enterprise Risk Management  Insurance Management  Business

Continuity Planning, Recovery and Incident Management

Disaster

 Government, Law Enforcement Agency and Industry Liaison

 Intellectual Management

Property

and

Knowledge

A business strategy that considers risk is essential to achieving core objectives – without it, business plans and profitability can be critically affected. A risk management strategy will be brought to life through the ongoing cycle of risk prevention, detection, analysis and response. The cycle enables the continuous tactical and strategic management of risk as the business changes shape and direction. A risk management strategy will therefore consider and integrate with all aspects of organisation, technology and operations and should be stimulated to achieve continuous improvement through performance monitoring and optimisation. 4

Business Assurance | Revenue Assurance | Fraud Management | Receivables Management | Security | Operational Assurance

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Business Assurance - More than ERM Applying Business Assurance principles combining Revenue Assurance and Risk Management practices in the Telecommunications, Media and Entertainment sectors

Business Assurance further enables business evolution by ensuring an appropriate balance of risk management and customer experience without that balance, sustainability will be challenging. With a sensible risk perspective, Business Assurance also seeks to improve operational effectiveness and efficiency to achieve high-performance operations. Intelligent use of resources and technology in delivering Business Assurance will generate additional profitability, liberating cash and resources to enable strategic business goals. Key components of Business Assurance include Revenue Assurance, Fraud Management and Receivables Management. Carefully applied knowledge in these domains will accelerate profitability and improve customer experience. Empowering resources and teams to deliver highperformance also requires well-considered, ongoing development programmes.

The AssuringBusiness vision At AssuringBusiness we like to look ahead. We like to challenge thinking in our sector, and drive new ways of doing business. Moreover, we like to drive new ways of assuring business. There are already some organisations adopting Business Assurance as a concept. There is also an increasing focus on the intelligent use of software solutions to deliver a highly effective Business Assurance operation. But there is more to this than clever system solutions. Unless we harness those solutions with the right business processes, supporting appropriate policies and being driven by skilled people in wellconsidered organisation structures, then returns will never be as strong as they should.

Knowledge is a major asset and I would challenge all businesses to strive to retain and develop such expertise where possible. At AssuringBusiness we work hard to translate our knowledge into real and rapid benefits each and every time we deliver. I also urge you to look within to ensure that your future business structure is organised and resourced appropriately, looking to the future of that business, and how best it may be assured and optimised for the long-term. Business Assurance is coming on strong. Maybe not just around the corner for everyone, but maybe a little along the street. I believe that those who embrace the concept in this fast-changing digital world will reap more of the benefits and be much better positioned to compete in the increasingly low-margin territories into which we venture. Please see www.assuringbusiness.com for a more detailed perspective of the components that might be deployed within a strategic plan. Alternatively, Contact Us to discuss your precise needs.

5 Business Assurance | Revenue Assurance | Fraud Management | Receivables Management | Security | Operational Assurance